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October 09, 2006

Was Adam Smith a doctrinaire Free Trader or a proto-Social Democrat? James Buchan's book argues he was neither: Adam Smith and the Pursuit of Perfect Liberty - James Buchan

The corpus of Adam Smith's writings, from The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations to his various essays on philosophical subjects, has provided the generations that followed with an inexhaustible supply of wisdom. Smith's perspicacity with respect to political economy has never been in doubt, and his contributions to moral philosophy, renowned in his lifetime, are being increasingly recognized. Yet Smith was preternaturally guarded when it came to his politics, which has resulted in both sides of the political spectrum squabbling over his legacy. The Scottish novelist and historian James Buchan's latest offering, Adam Smith and the Pursuit of Perfect Liberty, in part attempts to stake out a middle ground for Smith's ideology in the debate between classic liberals and reformed socialists.

Mr Buchan is well-equipped to handle such a subject, having previously written Frozen Desire: The Meaning of Money (1997) and Capital of the Mind: How Edinburgh Changed the World (2003). Buchan actually begins his account of Smith's life and works in the present day, by relating a 6th February, 2005 speech delivered by former US Federal Reserve Chairman Alan Greenspan in Smith's birthplace, Kirkcaldy, which featured the repeated invocation of "the invisible hand", a concept which occurs precisely three times in Smith's oeuvre. Buchan proceeds to caution those who consider Smith a doctrinaire free trader, pointing to Smith's support for certain monopolies, duties, progressive income taxation schemes, and sumptuary laws.

Yet Buchan reserves even more bile for the likes of Gordon Brown, who has attributed to Smith the phrase "the helping hand" (which in fact occurs three fewer times in Smith's writings than does "the invisible hand"). Buchan continues:

Brown's passion for arranging "the different members of a great society," with his baby bonds and tax credits and windfall taxes and enterprise summer camps and gap years and garden flagpoles, has done more to erect what Smith called "systems of preference and restraint" than any British finance minister of modern times.

This eloquent and withering critique of Brown's quixotic attempt to melt down the classic liberal Adam Smith and recast him as a social democrat avant la lettre is certainly welcome. However, the preponderance of this slim volume is not concerned with contemporary political questions, and has far more to do with Smith's life, from Kirkcaldy to Oxford to Glasgow University and the Edinburgh Custom-house, and Smith's philosophy, primarily as seen in The Theory of Moral Sentiments and The Wealth of Nations.

Smith's Theory of Moral Sentiments, which represented an ambitious attempt to explain the warp and woof of human feeling, is seen by Buchan as essentially democratic, anti-authoritarian, and optimistic. After all, Smith generally rejected innate differences in natural abilities, and declared that:

In ease of body and peace of mind, all the different ranks are nearly upon a level, and the beggar who suns himself by the side of the highway, possesses the same security which kings are fighting for.

It is this forgotten side of Smith that Buchan truly succeeds in bringing out to a general audience, the side that admired beggars sunning by roads, the side that thought Irish prostitutes were particularly beautiful by dint of their potato consumption, the side that spent page upon page detailing the sentiments of the vain, the proud, the foolish, and the "important coxcombs". It is, as Buchan puts it, as if Aristotle and Theophrastus were merged with Oliver Goldsmith.

Buchan likewise succeeds in his concise treatment of The Wealth of Nations, including but going beyond the traditional analyses of division of labour and the salubrious effect of self-interest. Smith's intense antipathy towards mercantilist policies is acknowledged, but Buchan also stresses Smith's pragmatism. Mercantile interests in the House of Commons were

like an overgrown standing army,

Smith wrote, but he also offered the caveat that market changes should be introduced

slowly, gradually, and after a long warning,

and that

To expect, indeed, that the freedom of trade should ever be entirely restored in Great Britain, is as absurd as to expect that an Oceana or Utopia [i.e. an ideal commonwealth] should ever be established in it.

The small critiques of Smith offered up in Adam Smith and the Pursuit of Perfect Liberty warrant some mention. Buchan finds fault with

reckless a priori argument originating in untested propositions,

which, though accurate, is a deficiency part and parcel of most works of Eighteenth Century philosophy, given the inchoate state of the study of history and archaeology at the time. This criticism is charged specifically at Smith's theory of the development of money, yet Buchan himself acknowledges that

the origins and ancient history of money are a riddle.

In any case Smith acquits himself rather well in the theory of value and price, which was the point of the historical exercise in the first place. Buchan curiously chides Smith for a

disdain of mere fact,

but then laments

the parade of dead laws, forgotten excises and superannuated commodities, from the price of a quarter of wheat in 1349 to the tonnage of white herring caught in British waters in 1771.

It is precisely the breadth and depth of Smith's learning, and his ability to extrapolate from real socio-economic phenomena, that has made his works so valuable to posterity, as opposed to surviving as merely a philosophical lagerstatten. Finally, Buchan notes the:

desert of celibate print without so much as the flutter of a petticoat.

Fair enough, though this applies more to The Theory of Moral Sentiments than The Wealth of Nations, and regardless has fairly limited ramifications.

In sum, Buchan's contribution to the popular literature concerning Adam Smith is certainly useful, insofar as it is astute, accessible, and utterly jargon-free. Moreover, it fully succeeds in its stated goal of emphasizing the nuanced nature of Smith's thought. In a world of collapsing Doha rounds and with mercantilist and free trade impulses vying with one another, this is vitally important. Perhaps of equal importance is the way in which Buchan fuses Smith's moral philosophy and political economy, just as Smith intended, but has often been forgotten. In one passage of The Wealth of Nations, Smith poked fun at aristocrats who:

For a pair of diamond buckles perhaps, or for something as frivolous and useless…exchanged the maintenance...of a thousand men a year, and with it the whole weight and authority which it could give them. The buckles, however, were to be all their own.

Or, as Voltaire put it,

Le superflu, chose tres necessaire.

Nuggets like this show that the moral and the economic were intertwined in the Scottish Enlightenment, as they should be in our time, and Adam Smith, with James Buchan as a guide, provides ample insight into how to set our priorities straight, and how better to gear our individual lives and governments towards the more perfect liberty of Stoic self-interest.

Matthew Omolesky recently received a master's degree in Diplomacy and International Relations from the John C. Whitehead School of Diplomacy, and is currently a Juris Doctor candidate pursuing a certificate in international trade and development at The Ohio State University, Columbus, Ohio.

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